The bounce took two days. Interestingly on friday the SPY retraced 38% of last weeks down move, then yesterday the SPY moved to a 50% retracement. Before the end of the day it moved back down to the 38% retracement. At the open the 10yr fell out of bed, off 15 ticks. This drove the mkt down at the open. But by 7:50am, much of the down gap had been filled. Pushing on lows at 8:15
Quote of the day: Taken from the Stock Trader’s Almanac. “The worst bankruptcy in the world is the person who has lost his enthusiasm.” – H.W. Arnold
Interesting sidenote – the talking heads have been talking about “Global LIquidity” pushing the markets higher and higher. I remember that from the late 90’s… Tech is here to stay, prosperity forever, etc…
Here is the market driver: 10 yr Weekly Chart
Here are the trades I placed:
I like these as a mispricing. I can wait on these. Currently the Reward/risk is 11:1, with the max loss being .09 per contract.. I don’t intend to hold on to these until Dec. Rather, I will start unloading these as 1 unit lots @ .25 and up.
CREE – 2 units – Dec/Jan 25p for .09
1 Unit Dec/Jan 22.5p for .10
EK. – hit it’s high, now it is bouncing off support @ 26. I am attempting to unwind my remaining positions. I have some expectation that the price will move toward 25.
The market slid hard in the afternoon as the bonds fell to session lows, and their highs yields in 5 years.
I am happy to sit on my hands today and let my positions work. Another 15-25 pts in the SPX would be a thing of beauty.
I backed up those CREE orders with about 50 contracts, then the spread moved out.
AMTD, COGN, and STLD spreads opened up nicely.
The bounce took two days. Interestingly on friday the SPY retraced 38% of last weeks down move, then yesterday the SPY moved to a 50% retracement. Before the end of the day it moved back down to the 38% retracement. I am looking for some mispricings as people scramble